By Frank A. Cania
BridgeTower Media Newswires
If you've had children home with you for a few weeks, I'm guessing you've heard, "that's not fair!" a time or two. When our kids were young, and feeling the world was being unfair to them, I would explain, "Life is never fair, it's just more obvious when you can't have something you want." (Right. I'll bet that line calms a screaming 5-year-old instantly.) But what is the appropriate response when adults ¾ one or more of your employees ¾ feel shortchanged?
Several clients have called and emailed concerning something I refer to as CARES-envy. This increasingly widespread issue occurs when employees, who are working during the COVID-19 crisis, learn their co-workers, who are not working, are being paid their full wages — or more! I've identified two forms of this malady:
CARES-envy UI; and CARES-envy PPP.
CARES-envy UI (sounds like a Law & Order knock-off) occurs when employees who are working during the COVID-19 crisis learn that their furloughed/laid-off co-workers are collecting more from unemployment insurance (UI) benefits than they were paid for working. (An acute case happens when the already-upset employees calculate that they would also make more from UI benefits than they're being paid to work.) How could that happen? The CARES Act authorizes a $600/week federal emergency UI benefit, called Pandemic Unemployment Compensation (PUC), to be paid to unemployed workers “eligible for $1 or more in underlying UI benefits.” (Wait, $1 is a typo, right?) For unemployed workers in NY State, where weekly UI benefits range from $104 to $504, that means a total weekly UI benefit between $704 and $1,104.
For example, Barb's Bears, a company that produces and sells Teddy bears, had 50 employees before the COVID-19 crisis. Not considered an essential business under the governor’s executive order, the company closed and furloughed 40 employees on March 20. Although the furloughed workers’ regular wages were $700/week, they each received UI benefits of $950/week (NYS UI $350, PLUS $600 PUC) ¾ $250/week more than their regular wages. As soon as they heard the news, the employees who were not furloughed called Barb, the company’s owner, and said: “That’s not fair!”
CARES-envy PPP occurs when employees who are working during the COVID-19 crisis learn that some of their co-workers, who are not working, are being paid their regular weekly wages by their employer. Why would an employer do that? Also authorized by the CARES Act, the Paycheck Protection Program (PPP) provides loans of up to $10 million to qualified employers with fewer than 500 employees. The PPP contains provisions for the loan to be partially or fully forgiven (i.e., no repayment) if the employer meets specific criteria. The criteria for loan forgiveness include using at least 75 percent of the proceeds for payroll expenses and employing the same number of workers the employer had during the PPP loan measurement period. Barb's Bears received a PPP loan and had 50 employees during its loan measurement period. Barb notified all the employees that the company received the loan, and the furloughs would end on May 4. She explained that, although none of the furloughed employees will be able to return to work for a while, the company is required to use the proceeds from the PPP loan to pay their wages for the next eight weeks. Shortly after the announcement, the same employees that were unhappy about the UI situation called Barb again. Even more upset, they complained about being required to work for their weekly wages while other employees are being paid to sit home and do nothing. "That's not fair!"
What’s worse, Barb received angry calls from many of the previously furloughed employees. They couldn’t understand why, if they weren’t going to be working, they weren’t allowed to continue collecting the much higher weekly UI benefits. They said — you guessed it — “that’s not fair!”
As business owners, HR professionals, managers, and responsible adults, we don't have a good answer to "that's not fair!" in these situations. We can explain that "these are unintended consequences of the federal government's actions to financially protect the unemployed and small businesses during the COVID-19 crisis."
(Ummm, was it really unintended? Didn’t a senator from Vermont threaten to block a vote on the bill if any changes were made to the $600/week PUC benefit?) But, already upset, employees will likely hear, "blah, blah, blah — it's not my fault — blah, blah, blah — blame the government — blah, blah, blah."
As a small business owner, I understand the pressures and frustrations employers continue to face as a result of the COVID-19 crisis. I’m also keenly aware that, regardless of the circumstances, employers should be careful to keep their frustrations in check where employees are concerned. Imagine Barb responding, "Stop complaining; you're lucky to have a job!" At best, that would exacerbate the situation. A stressed employee, already convinced of unfair treatment, may respond, "Lucky? Screw you! Lucky is getting paid not to work or making more on unemployment than you're paying me to work!”
Now is the time to show your gratitude by rewarding employees that have surpassed reasonable expectations during this crisis. In the short term, show your appreciation by ensuring they have the tools they need to be efficient and effective. Send them a note with a gift card or pay for a meal from their favorite restaurant delivered to the family for dinner. From a longer-term perspective, consider a tiered performance bonus that gives them something now, and more at regular intervals as they continue to perform well. Grant them additional PTO to be used after business begins to normalize and allow them to carry it forward through next year.
Few things that have happened since this crisis began have been “fair” to employees or employers. That’s life. But if showing your appreciation to some of your most dedicated employees can take the sting out of perceived unfairness, it will be well worth it for both of you.
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Frank Cania, MSEmpL, AWI-CH, SPHR, SHRM-SCP, is president of HR Compliance Experts LLC, located in Pittsford, NY. Frank provides human resource consulting services including workplace investigations, HR audits, harassment prevention training, employee handbooks, HR outsourcing, and a variety of other HR compliance-related services. Contact Frank at 585-416-0751 or frank@hrcexperts.com.
